Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) is initiating an update to the 2018 Low-pH Feasibility Study on its flagship 100%-owned Lance Project in Wyoming, US, ahead of considering a final investment decision on restarting production.
It has appointed Western Water Consultants, Inc. d/b/a WWC Engineering, a leading US-based consulting and engineering firm with significant uranium in-situ recovery (ISR) expertise, to author the study.
The updated study is expected to be completed in the third quarter of 2022 and will incorporate results and conclusions from technical de-risking activities, including the recently completed MU1A field demonstration.
A final decision on resuming commercial production operations using the low-pH ISR method will be based upon the conclusions of the updated study and the prevailing uranium market conditions.
Final investment decision
Peninsula managing director and CEO Wayne Heili said: “With the strengthening market for uranium and with a renewed emphasis on the US domestic capacity for uranium production, we want to ensure that the economic analysis that we rely upon is developed to the highest standard of accuracy and based on technically robust analysis.
“Our team has put in substantial effort to de-risk many facets of the Lance Project and it is appropriate that we update our financial models ahead of considering a final investment decision with respect to restarting production.
“The economic studies in parallel with our early preparatory works program that we are now in the process of conducting will facilitate an accelerated timeline should we push ahead with a restart.”
MU1A field demonstration
Peninsula’s experienced ISR team has completed its evaluation of the data obtained from the recently completed MU1A field demonstration.
The updated study will incorporate important results and conclusions from the demonstration along with updated process designs, capital costs and materials and supply costs.
Current supply chain issues
Inflationary pressures corresponding to current supply chain issues have been noted in the US markets since early 2022.
Peninsula’s team and advisers will be assessing the likely longer-term impact of these more recent developments on the updated study.
Feasibility study
On the capital requirements side, the company is completing updated engineering design and costing studies for reagent addition systems, solids management systems, and process plant modifications based on the conclusions from the field demonstration.
On the operational side, the company has developed updated grade and recovery curves, ISR pattern design parameters, reagent requirement models for both sulfuric acid and hydrogen peroxide, and reagent costing models based on the field demonstration outcomes.
In the field demonstration, the reagent requirements and grade responses were shown to be related to well spacing, with closer spacing driving better results.
The updated cost model will reflect the optimised balance between the capital cost of well installation and the direct operating costs.
Funding
The updated study and early preparatory work activities will be funded from existing cash resources and the net cash margin generated from the company’s portfolio of uranium concentrate sale and purchase agreements.